Argo Blockchain (ARBK), a Bitcoin miner, will avoid filing for bankruptcy after deciding to sell Galaxy Digital (GLXY), the Helios mining plant in Dickens County, Texas, for $65 million.
According to a statement released by the firm, the miner will also receive a new $35 million loan from Mike Novogratz’s cryptocurrency-focused financial services company, which Argo’s mining hardware will back.
According to the CEO of Argo, “We’ve been looking for ways to keep mining despite the bear market, reduce their debt, and maintain access to Texas’s unique power infrastructure.” The firm stated.
From his words, all of these objectives are accomplished by the agreement with Galaxy, allowing them to continue fighting.
What happened to go?
When a plan for $27 million in capital fell through in October, Argo found itself in a difficult situation. Argo will be able to improve its financial sheet and avoid bankruptcy with the aid of the acquisition. In order to avoid filing for Chapter 11 bankruptcy, the miner stated earlier this month that it was in advanced negotiations to sell some of its assets and finalize an equipment finance agreement.
In addition, Argo will sign a two-year hosting deal with Galaxy, guaranteeing a location for Argo’s computers to continue mining at the Helios facility.
According to Chris Ferraro, president, and chief investment officer of Galaxy, the purchase was set up to strengthen Argo’s capital structure and balance sheet. According to him, Galaxy is positioned to address Argo’s problem while expediting our mining capabilities’ increase.
Early trading on the London Stock Exchange saw a more than doubling of the cryptocurrency miner’s shares (ARB). A 24-hour suspension of trade in the company’s Nasdaq stock (ARBK) was sought yesterday during the London market’s closure for a U.K. bank holiday.
Argo is one of several miners fighting to survive as growing energy costs drive up expenses and persistently low bitcoin prices drive down profits. One of the largest miners by computer power, Core Scientific (CORZ), filed for bankruptcy this month. In contrast, Compute North, another significant player in the industry, filed for Chapter 11 bankruptcy protection in late September. A debt restructuring agreement was also made between the bitcoin miner Greenidge and its lender NYDIG, although the firm still faces the possibility of going bankrupt.
